Christian Credit Counselors Blog

5 Credit Counseling Questions You Feel Too Timid to Ask

If you feel awkward about asking about credit card debt and a poor credit score, you aren’t alone. Often, people feel timid or embarrassed to talk about money. When you receive credit counseling, you gain knowledge that will help you improve your personal finances. Trained Christian credit counselors are not judgmental about your financial background. According to a recent article by wisebread.com, there are five debt counseling questions many consumers feel too embarrassed to ask. It’s not always smart to ask family and friends, not just because you don’t want them to know about your financial problems. Your family and friends often have good intentions, but share misinformation instead of helpful and accurate tips for overcoming debt.

Should I declare bankruptcy?

If you have too much credit card debt to handle, you have likely considered bankruptcy. In most cases, you don’t need to take that route. A more positive option is to consolidate debt with a debt management plan that lets you pay back your debtors but at a lower interest rate. A debt management plan gets creditors off your back, which makes bankruptcy unnecessary.

What are alternatives to debt settlement?

Debt settlement is a bad word in the world of personal finances. In many cases, debt settlement programs are scams. While bankruptcy is an alternative to debt settlement, it’s a poor one. With bankruptcy, people often elect to file either Chapter 13 or Chapter 7. With Chapter 13, you still pay back debt but it’s “reorganized.” With Chapter 7, you often lose your car and any possessions of value. Of course, with a debt management plan, you avoid all the downsides of bankruptcy and debt settlement scams.

How do I deal with credit card debt?

If you wonder how to deal with crippling credit card debt, you likely have high interest credit cards with a high balance. Experts suggest consolidating debt instead of trying to transfer to a credit card with a lower rate. When you make a balance transfer, you often run up the original credit card debt instead of leaving it at a zero or low balance.

How can I boost my credit score?

To boost your credit score, get out of credit card debt and pay your bills on time every month. Avoid taking out a loan on a car that you can’t afford. Many consumers think they have an affordable car payment, but sign up for bi-weekly payments or payments every other week. Consider whether a particular payment fits into your monthly budget or whether you are overextending yourself.

Is there such a thing as good debt?

After you sign up for a debt management plan, you have more hope. Some people wonder whether there is good debt and bad debt. Bad debt is any debt at a high interest rate. If you make a 5 percent on your money by investing it, but pay 20 percent in interest on a credit card, you don’t make financial progress. As far as good debt, most people agree a home mortgage and student loan debt is healthy.

At Christian Credit Counselors, we answer tough questions for our clients. For more information on credit counseling, please contact us.